₦airaland Forum

Resumption of international transactions on naira cards pits banks against fintechs.

The resumption of international transactions on naira cards has pitted the banks against financial technology (fintech) companies offering virtual dollar cards, as Nigerians now have more options than they did in the last three years.

Between July 2022 and January 2023, Standard Chartered Bank, First Bank of Nigeria (FBN), Guaranty Trust Bank (GTBank), and Zenith Bank announced the suspension of international transactions on their naira debit card, giving rise to fintechs like Chipper Cash, GoMoney, Cardtonic, Wallet Africa, BoldSwitch, Geegpay, and Fundall to fill the vacuum.

Within the last three years, the fintechs enabled Nigerians without a bank dollar card to pay for services like Amazon, AliExpress, Netflix, Spotify, YouTube and conduct other international transactions.

However, their market share is about to shrink as banks’ naira cards can now be used for cash withdrawals on automated teller machines (ATMs) abroad, purchases on international websites, and point-of-sale (POS) payments outside Nigeria.

FACTORS THAT WILL DECIDE USERS’ NEXT MOVE

With Nigerians now having more options, some users told TheCable that several factors like spending limit, foreign exchange (FX) rates, as well as wider platform acceptance, will determine their next move.

Geoffrey Nwankpa, a frequent user of dollar virtual cards, who said he is willing to switch to a bank naira card due to certain charges that come with using fintech virtual cards, said the spending limits on cards will determine his decision.

While noting that payment for foreign transactions would not be difficult anymore, Nwankpa hoped that “the commercial banks would not put absurd limits on international transactions. Imagine putting a limit of $1,000 a month for me. It cannot work. So I hope their limits will be fair.”

Also, he said the exchange rates are another factor to consider, as one of the fintechs he is using charges “outrageous rates.”

“You might purchase a dollar at N1,800, and then to sell it will be like N1,500. On top of that, you have $1 monthly card maintenance. If you send or receive USDT, there will be a deduction,” he said.

“Let’s say I send out $100 from my fintech wallet. I would be receiving about $98.5 on my exchange. It is the same for receiving.”

Also, Odudu Inyang-Udoh, who uses two virtual credit cards, described both as “seamless,” however, he said he is considering whether to continue using fintech platforms.

Inyang-Udoh said his decision will hinge on “transaction charges and limits, exchange rates, etc,” adding that he would gladly switch if the naira debit card offered better value for money when making online purchases.

He added that reliability, in terms of wider platform acceptance, also matters to him.

“Potentially, I also see ease of payment for online transactions, especially on international platforms. But everything depends on how the advantages of using the naira debit card outweigh virtual credit cards,” Inyang-Udoh said.

DIFFERENCES IN NAIRA AND VIRTUAL CARDS FOR FOREIGN TRANSACTIONS

TheCable understands that banks have lower transaction limits compared to fintechs, as Wema Bank and First Bank offer $1,500 quarterly, GTBank restricts users to $1,000 quarterly, and UBA has a daily and monthly limit of $1,000 — depending on the card used.

However, Chipper Cash and Eversend have a monthly spend limit of $10,000, Geegpay restricts users to $5000 monthly, and Ufitpay has a $2,000 monthly limit, while Fundall has no limit.

In addition, BoldSwitch and Sendbit have a $10,000 maximum transaction limit.

Also, note that while the official and parallel exchange rates are N1,530.26 per dollar and N1,550/$, respectively, Chipper Cash FX rate is N1,714/$, and that of Eversend is N1,619, as of July 11, according to Monierate.

On charges, virtual card operators like Geegpay deduct $0.5 per dollar transaction and 0.9 percent of transaction value for non-dollar purchases, while BoldSwitch offers charge-free transactions on US websites, but shopping with other foreign currencies attracts 2.5 percent of transaction value.

Furthermore, Eversend charges a fee of $0.50 per transaction, but bills a 3.5 percent fee when customers make payments via euros and pounds.

Also, Ufitpay imposes a 1.5 percent charge on each transaction on USD virtual cards.

However, banks like GTBank and UBA only deduct value-added tax (VAT) on each transaction.

‘USE OF NAIRA CARD FOR FOREIGN TRANSACTIONS WON’T AFFECT OUR OPERATIONS’

BoldSwitch, a fintech startup, told TheCable that the resumption of international transactions on the naira card will not affect its operations.

“Our value proposition remains intact because many users still seek alternative platforms that provide higher transaction limits, faster access, and more flexible onboarding than traditional banks,” BoldSwitch said.

“The lifting of the suspension may provide more options for consumers, which is a good thing. However, bank-issued naira cards often come with strict limitations in terms of monthly limits, high rejection rates on global platforms, and foreign currency instability.”

“BoldSwitch continues to offer stability, transparency, and access to international payments without the usual friction. We expect to see more curiosity in the space but not necessarily a decline in demand for our services.”

On how the company plans to retain users amid growing competition from commercial banks, BoldSwitch said it has built several infrastructures to enhance user experience, including AI-powered features tailored to users’ needs.

“We are also developing more business-focused solutions for in-store and creator payments that banks currently do not provide. In essence, we’re not just providing financial services; we’re building a modern digital finance ecosystem designed for the realities of young Africans and the diaspora,” the company said.

Also speaking, Cardtonic, a digital exchange platform, also said it is a positive development because Nigerians should not be restricted from making international payments and purchases “because they are Nigerians.”

The company, however, said it is still assessing the situation.

‘IMPACT WILL BE LIMITED’

Commenting on the development, Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co., said that after banks halted naira transactions on dollar cards, most users switched to using the lenders’ dollar cards.

As such, Olubunmi noted that the impact on fintechs may be limited, given that the customer base they acquired during the period remains relatively small.

Also, he said the banks that recently lifted the suspension on dollar transactions for naira debit cards “still had a limit.”

Unlike in the past, when service users had a very high limit and could carry out a wide range of transactions, Olubunmi said the current allowable spend remains relatively restrictive.

“Although it is better than zero, it is nowhere near where we used to be,” he said.

“Some of the fintechs might see a decline in their transactions, but people might still prefer to use the fintech.”

Olubunmi added that fintechs’ business model means “if one area is not working, they can pivot into something else.”

Speaking further, Olubunmi said there are more areas where fintechs and banks can collaborate than compete.

“The fintechs cannot really compete with the banks because they do not have as many funds as the banks, especially for domiciliary accounts. They do not have it as much as the banks do,” he said.

“For most fintechs, it is either they pivot into other things or find a way of collaborating with the banks.”

Also commenting, Charles Abuede, research analyst at Cowry Asset Management Limited, said the new development signals growing confidence in the FX market and improved liquidity within the banking system.

Abuede added that the policy shift may also be a deliberate strategy to attract more FX inflows — especially from remittances — by boosting confidence in the system and improving access to global payments.

SOURCE: https://www.thecable.ng/resumption-of-international-transactions-on-naira-cards-pits-banks-against-fintechs/

Most fintech in Nigeria were hastily out together to solve temporary policy problem ...you hear CBN suspend card payments you rush and open virtual card failing to realise govt can relax it's policy at any moment

Awesome! My joy knew no bounds when I got the Email from GTBank some days ago that my GTBank Naira Card can now again pay for Dollar transactions, etc. What a great relief!
The Ex-P without any iota of pity for Nigerians plunged millions of small and even large scale Businesses into excruciating Pain when he Commanded all Banks to deactivate the ability from ATM Cards just to greedily enrich his People that were massively into Bureau de Change.
I remember how me and my friend had to rush to open Dollar Account and then went to buy Dollars from them on Street at unbearable rate just to fund the Dollar Account with which we manage to keep our Business afloat. That was before OPay and others later came up as way to lessen the stress.

Money and banking
Banking and money
All join as far as d with money s there

They should remove the useless limits... They shouldn't dictate how I spend my money.

As for Fintech, their greed will kpai them

At last, FINTECHS won't bully me with FX charges like they did before again.

Current cost per $100 👇🏾👇🏾👇🏾

Anyway, Fintech might soon drive Nigeria banks out of business

Resumption of naira card was a big relief. Cardoso is really earning his pay, little wonder he was named African CBN Governor of the year.

-Kiss the truth!

Wow, thanks for sharing this insightful article! The analysis of how the resumption of international transactions on naira cards is pitting banks against fintechs in Nigeria is really informative. I appreciate the breakdown of the differences in transaction limits, charges, and exchange rates between banks and fintechs. The quotes from industry experts and fintech companies add valuable context. Great job!

Offpoint1:
They should remove the useless limits... They shouldn't detect how I spend my money

Guarantee Trust Bank has pegged the limit on their Naira card to $4000 quarterly.

At least it's better than having nothing before.

TimeManager:
Resumption of naira card was a big relief. Cardoso is really earning his pay, little wonder he was named African CBN Governor of the year.

-Kiss the truth!

My Biggest relief about banking since this year started.

99thEnemy:
At last, FINTECHS won't bully me with FX charges like they did before again.

All the grammar and adverts of same companies running the same product with the same error pages.... Are you referring to these as bully or share lack of understanding of financial knowledge which is causing the downturn of the economy since 99kokoro? As a matter of facts nothing will change and the problem will persist with even bigger huddles with these your FiNSTech or whatever you call them. First thing your president did was to get an account when he got into office. A young one at that.... Ask yourselves why.

Lol Bank now Charges almost same with Fintechs and put a ridiculous limit which makes it no no

Good for users ,bad for such Fintechs . They should rebrand to prevent shuttingdown

99thEnemy:
Guarantee Trust Bank has pegged the limit on their Naira card to $4000 quarterly.

At least it's better than having nothing before.

It's 1000 Quarterly not 4000

Not enough original content


Just seeing that they've update it to 4000 from the earlier 1000

I prefer the cirual cards. I can disable the card or freeze it to keep my funds safe when any merchant site is hacked even on weekends.

Grey no dey give me problems and the exchange rate is competitive

morikee:
It's 1000 Quarterly not 4000

Not enough original content

Didn't you get their email?

Abi they later reversed it to $1000 ?

SalamRushdie:
Most fintech in Nigeria were hastily out together to solve temporary policy problem ...you hear CBN suspend card payments you rush and open virtual card failing to realise govt can relax it's policy at any moment

Last year we wanted to build an exchange service based on this. From our research, we conclude on a no-go decision coz we know government policy will shift.

I think the fintech can still proceed if they have the resource to satisfy their customer base. Legacy banks are too rigid to innovation, fintech might retain their customer on that.

GlobalWay:
Awesome! My joy knew no bounds when I got the Email from GTBank some days ago that my GTBank Naira Card can again pay for Dollar transactions, etc. What a great relief!
The Ex-P without any iota of pity plunged millions of small and even large scale Businesses into excruciating Pain when he Commanded all Banks to deactivate the ability from Nigerians' ATM Cards just to greedily enrich his People that were massively into Bureau de Change.

Wow. Finally.


So it's true.
Enough content... E ought content.. Enough counter

I have been waiting for this report since forever. I knew this was inevitable.

This is the problem with Nigeria, inconsistent policies. Once again, the dollar reserve will be depleted from importing luxury goods.!Then tye resultant effect will spill to everything else.
This will only benefit a few. What happens to raising a Form. M if you are importing goods ?

99thEnemy:
Guarantee Trust Bank has pegged the limit on their Naira card to $4000 quarterly.

At least it's better than having nothing before.

Yes.
Good News! Good News! Good News!!!
It is now that I'm beginning to feel impact of the current Government, my Company is heavily dependent on Importation.

They should go to blazes
I will keep using my virtual cards and anytime I ready to use ATM debit card I will let dem know

SalamRushdie:
Most fintech in Nigeria were hastily out together to solve temporary policy problem ...you hear CBN suspend card payments you rush and open virtual card failing to realise govt can relax it's policy at any moment

That's why policy stability is good for business.

TimeManager:
Resumption of naira card was a big relief. Cardoso is really earning his pay, little wonder he was named African CBN Governor of the year.

-Kiss the truth!

Oga the suspension of naira card had little to do with cbn but rather policies of the individual banks. The reason for this opinion is that some banks eg providus bank never suspended forex payment on its cards.

Offpoint1:
They should remove the useless limits... They shouldn't detect how I spend my money.

As for Fintech, their greed will kpai them

Dictate, not detect.

24 oversabi characters needed

My Gtb card didn't work over the weekend. Tried Zenith card, same problem.

Are we supposed to get new bank cards, or the thing has not started operating.

Do Opportunities exist?
Are you having update at the moment, or will have some soon? Please let's connect